#美联储货币政策# Just saw that the US July PPI data has been released, with a year-on-year rate of 3.3%, significantly exceeding the market expectation of 2.5%. This data is the highest since February, and the month-on-month rate recorded 0.9%, marking the largest increase since June of last year. Typically, PPI is considered a leading indicator for CPI, which may indicate that inflationary pressures still exist.

Interestingly, although the PPI data exceeded expectations, the market's expectations for a rate cut by the Federal Reserve in September were only slightly adjusted. The probability of a 25 basis point cut remains as high as 92.5%, while the probability of keeping the rates unchanged is only 7.5%.

This market reaction seems somewhat contradictory. On one hand, higher-than-expected PPI data should increase inflation concerns, which theoretically would lower expectations for interest rate cuts. On the other hand, the market still seems to firmly believe that the Federal Reserve will soon begin a rate-cutting cycle.

This may reflect that the market's concerns about slowing economic growth outweigh worries about inflation. Alternatively, the market may believe that this is just a short-term fluctuation, insufficient to alter the overall policy trajectory of the Federal Reserve.

Next, it is necessary to closely monitor other economic indicators, especially the CPI data and employment data, as well as the statements from Federal Reserve officials. These factors will collectively influence the market's expectations of Federal Reserve policy, which in turn will affect asset price trends.